Summit Hotel Properties, Inc. (NYSE:INN) Q2 2024 Earnings Call July 30, 2024 9:00 AM ET

Company Participants

Adam Wudel - Senior Vice President, Finance, Capital Markets and Treasurer
Jon Stanner - President and Chief Executive Officer
Trey Conkling - Executive Vice President and Chief Financial Officer

Conference Call Participants

Dany Asad - Bank of America
Michael Bellisario - Baird
Chris Woronka - Deutsche Bank

Operator

Welcome to the Summit Hotel Properties 2024 Second Quarter Earnings Conference Call. I will now be passing the line to Adam Wudel, Senior Vice President of Finance, Capital Markets and Treasurer.

Adam Wudel

Thank you, Daniel and good morning. I am joined today by Summit Hotel Properties’ President and Chief Executive Officer, Jon Stanner; and Executive Vice President and Chief Financial Officer, Trey Conkling.

Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our SEC filings. Forward-looking statements that we make today are effective only as of today, July 30, 2024, and we undertake no duty to update them later. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at www.shpreit.com.

Please welcome Summit Hotel Properties’ President and Chief Executive Officer, Jon Stanner.

Jon Stanner

Thanks, Adam, and thank you all for joining us today for our second quarter 2024 earnings conference call. We were once again extremely pleased with our second quarter operating performance and financial results as adjusted EBITDAre increased 6% to nearly $56 million, which represented a new quarterly record high for the company. And adjusted FFO increased 10% compared to the second quarter of last year, which was our second consecutive quarter of double-digit growth in AFFO. Pro forma RevPAR increased 3.4% year-over-year as our portfolio continued to consistently outperform the total U.S. lodging industry and upscale chain scale. The second quarter marked the 13th consecutive quarter that our pro forma portfolio has exceeded the total U.S. average RevPAR growth.

Our asset management team and operating partners also continue to do a terrific job managing expenses during the quarter, resulting in hotel EBITDA growth of 6% on a flow-through of more than 70%, which drove hotel EBITDA margin expansion of 120 basis points compared to the second quarter of last year. Fundamentals continue to improve across the company’s portfolio in the second quarter, particularly in April and May, which had RevPAR growth of 4.5% and 6.5%, respectively. RevPAR growth for the quarter was predominantly driven by a 2.4% increase in occupancy, which was concentrated in urban and suburban markets.